Given a choice between caving in or calling an election, the safest course for the premier would be to play for time.

Premier Dalton McGuinty has to consider poll results that put Conservative support at 35.4 per cent, the NDP at 29.9 per cent and the Liberals trailing with 28 per cent. (April 23, 2012)

By:R. Michael Warren Published on Mon Jun 18 2012

Ontario NDP Leader Andrea Horwath had plenty of opportunity in April to negotiate changes to the Liberal minority government’s budget. Premier Dalton McGuinty responded by making a number of major concessions. He has every reason to believe he had a deal with Horwath.

Instead, he is facing a standoff that threatens to defeat his budget, bring down his government and plunge us into a costly election.

Emboldened by recent polls that show the Liberals trailing both the Tories and the NDP, Horwath has made a new, costly, last-minute demand. She will reduce the number of budget provisions the NDP currently opposes in committee but will not support changes to the contract-arbitration process governing the public service.

The Conservatives, who opposed the budget on the day it was tabled in March, also smell blood in the water. During last week’s budget review in committee Tory members surprised everyone by voting with the NDP against privatization provisions and other long-held Conservative principles.

Horwath has put McGuinty in a difficult position. If she is successful in removing arbitration reform from the budget bill in committee, and it comes to the legislature Wednesday for a final vote, McGuinty has three options:

• He could accept the change and pass the bill with the support of the NDP.

• He could go to the Lieutenant-Governor and ask him to dissolve the government, thus prompting a July election.

• He could ask the Lieutenant-Governor to prorogue the legislature until the fall.

None of these options is particularly attractive but Horwath’s partisan jockeying is forcing McGuinty to choose the least of these three evils.

The reforms the Liberals want to make to the public service arbitration system are long overdue. In their decisions, provincial arbitrators have often ignored local economic conditions and the compensation of comparable private sector workers. The result is that Ontario public servants enjoy wages and fringe benefits that far exceed those paid in the private sector. A 2008 study commissioned by the Canadian Federation of Independent Business showed that provincial employees enjoy an average compensation premium of 14.8 per cent. And last April, the Emergency Services Steering Committee, representing large urban mayors, regional chairs and police service boards, reported that Ontario public service wages rose a staggering 40 to 70 per cent higher than the consumer price index between 2005 and 2010.

To meet his deficit reduction targets McGuinty needs to bring the arbitration system back to earth. The Liberals have already abandoned provisions in the budget to outsource major services and privatize crown corporations. Unlike Stephen Harper, who refused to change a single word in his 425-page omnibus budget bill, McGuinty has agreed to bring these provisions forward later for debate in a separate piece of legislation.

But there is a point where the budget bill loses so many of its key provisions that meeting deficit-reduction targets becomes impossible. Horwath’s latest condition is costly. Combined with the other Liberal concessions, McGuinty may find that he cannot meet his budget goals.

If he comes to that conclusion, he could go to the Lieutenant-Governor and ask to dissolve the government and fight an election on his budget. But forcing an election on the budget won’t be a popular move.

Whichever leader is seen as responsible for a midsummer election only nine months after the last one will suffer at the polls. A recent Forum Research poll found that 44 per cent would blame McGuinty, 23 per cent Horwath and 17 per cent Conservative Leader Tim Hudak.

The premier also has to consider the recent ThreeHundredEight.com poll results, which put Conservative support at 35.4 per cent, the NDP at 29.9 per cent and the Liberals trailing with 28 per cent. This hardly augers well for an election on the budget.

McGuinty’s best course would be to prorogue the legislature until the fall. This would give the government a chance to do three things.

First the Liberals could a better job selling the budget’s key elements. The Forum Research poll indicates the public doesn’t seem to know what’s at stake.

Second, it would give the Liberals time to work with the opposition to try to find a way forward that still enables the government to meet its deficit-reduction targets.

And third, if McGuinty calls the Kitchener-Waterloo byelection for early September and wins the seat, the Liberals would return in the fall with a majority government.

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